Interest rates have slipped below 3% for the first time on record so your buying power has increased, we continue to be short on inventory so it is a great time to sell, and after Staying Home so much recently, you are ready for your next home! All of this means it is a great time to make a move – the only problem is, you aren’t sure if you can buy a home without selling first.
Programs That May Work For You.
Here are a variety of loan options that may work for you, depending on your financial situation.
- Cross Collateralization. This program is designed for a buyer who has a strong equity position in their current home. As a buyer you are able to access this equity with a loan that collateralizes both your current home and new home. When you sell your current home you can pay down the loan to reach your desired payment. It allows for a higher debt to income ratio to assist with qualification.
- Departing Residence Program. This program helps the seller that has the funds for the down payment on the next home, but not the income to qualify. It allows you to utilize the potential rental income you would have from your current house in your income calculation, without having to actually rent out your home.
- Asset Depletion. This program helps the seller who doesn’t have a traditional income, but has assets such as stocks & mutual funds, to derive an asset depletion income to qualify for the loan. This is especially helpful for sellers who are retired.
- Restricted Stock Units. This program helps executives and many in the high-tech industry that can show a 2-year history of receiving RSUs as part of their compensation to be included as reserves or income for qualifying purposes.
- 40-year loan. This program allows you to qualify for a larger loan amount – it is available on all occupancy types, cash-out refinances are allowed, and it can be used in conjunction with one of the other loan programs listed above to provide you with more options.
- Buy/Sell with a long close and/or rent back option. This is a non-financial solution to the problem. Negotiating to purchase or sell with a long closing timeline and/or potentially a rent-back option – you may need to look at an off-market purchase or sale for this option.
- Buy Contingent upon the Sale of your home. Sellers prefer not to get these offers – but if you have your home ready to go – inspected, prepared for market, staged, photos taken, competitively priced – and you are just waiting to find a home and get into contract – some sellers are accepting contingent offers right now.
You can even save your cash on hand for a strong down payment by paying for any prep work your home needs using the Windermere Ready program. Windermere Ready is a short-term loan program where no payments are due during the loan and the loan is paid off when your home is sold. And, unlike other brokerage programs, Windermere Ready lets you use the contractors you want so you can keep the cost down and control the quality of the work you have done.
Article Published in the Woodinville Weekly Real Estate Section. Since 2017 The Blue Team has written the bi-monthly Real Estate Column sharing their expertise in this community publications. Sharing their Tips for Home Buying, Tips for Home Selling, Tips for Investors, Buying & Selling Luxury Homes, Real Estate Transitions (Including Relocation & Senior Real Estate Tips), and Equestrian Real Estate.